Financial planning for individuals inherently involves the selection and purchase of various financial assets forming a collection of core investments with the hope that they appreciate in value. Most individuals, however, are ill-equipped to research the various investment opportunities so that they can pick and choose appropriate investment vehicles that provide the requisite balance of risk/reward to address their current needs.
Accordingly, the brokerage industry in this country has customarily provided guidance to investors regarding the appropriateness of select financial investments. By working with their brokers, individual investors can establish goals and needs for future capital and income. Relying on vast experience and state of the art technology, these professionals sift through the various investment choices and recommend a portfolio of select equity and fixed income securities, coupled with perhaps annuities, credit recommendations, insurance products and other relevant financial information. Taken together, the individual investor can adopt a wide ranging, comprehensive asset allocation strategy that is tailored to their needs and that seeks to maximize the opportunities of achieving their financial goals. Typically, clients compensated their brokers for their recommendations and other advice that was incidental to the conduct of their business as brokers through the payment of commissions for the select securities purchased.
In recent years, there has been a trend to compensate brokers for their traditional services through fee arrangements that provide an alternative to commission-based pricing. In addition, there has been a corresponding growth in investor services, including banking type transactions (e.g., ATM, etc.) and non-bank services (online research tools, etc.), all provided by full service brokers, typically with separate fee structures. Although many individual investors have expressed interest in non-commission based fee structures for the payment of services offered by full service brokers, this demand was left unfulfilled in the marketplace as not practical in today's investing environment.
It was with this knowledge of the vacuum in financial service access arrangements that formed the impetus for the present invention.